[Edaily Reporter kyoungeun kim ] ECOPRO BM CO., LTD.(247540)reported third-quarter revenue that fell short of market expectations, largely due to sluggishness in the U.S. electric vehicle market. However, analysts note that medium- to long-term growth prospects remain valid, as the company is entering the U.S. battery energy storage system (BESS) market through the establishment of a new lithium iron phosphate (LFP) cathode material production line, and cathode material sales are expected to increase significantly starting in 2028.

Han Byung-hwa, an analyst at EUGENE INVESTMENT & SECURITIES, maintained a “Buy” rating on ECOPRO BM CO., LTD. in a report on the 6th but lowered the target price from 200,000 won to 180,000 won. This adjustment reflects the dilutive effect of a rights offering representing 10% of the total number of listed shares. The previous day’s closing price was 89,700 won.

ECOPRO BM CO., LTD.’s third-quarter revenue was 557.9 billion won, and operating profit was 12.1 billion won; revenue fell short of the consensus estimates (revenue of 593.5 billion won, operating profit of 12.3 billion won). An analyst explained, “Sales of cathode materials for electric vehicle batteries fell 16% year-over-year due to sluggishness in the U.S. electric vehicle market and a gap caused by model changes in Europe,” adding, “Sales of cathode materials for battery energy storage systems (BESS) also decreased by 25% as the U.S. BESS market shifted from a ternary-based focus to a dual-system centered on LFP.” In contrast, revenue from cathode materials for battery backup units (BBUs) used in data centers and for power tools increased by 54%. The Hungarian plant, which began operations in June, was temporarily suspended due to an environmental inspection by authorities but resumed operations at the end of October; related costs will be reflected in the third and fourth quarters.

The company also officially announced its entry into the LFP market. In its earnings release, ECOPRO BM CO., LTD. revealed plans to establish a new production line for 50,000 metric tons of LFP cathode materials. Currently, the company only operates a 4,000-metric-ton pilot line. One analyst noted, “Until now, the company had not been proactive about entering the LFP market, judging that it would be difficult to secure price competitiveness against Chinese firms and that maintaining its capabilities in the ternary high-nickel sector was more important.” The analyst added, “However, it appears the company has changed its stance as the BESS market has rapidly expanded and demand for non-Chinese LFP cathode materials in the U.S. market has surged.” The researcher added, “The fact that imports of Chinese LFP cathode materials could be restricted if the European Union (EU) enacts the Industrial Acceleration Act (IAA) is likely another reason for the investment.”

The company expects improvements in core business performance to begin in earnest starting in 2028. Production of cathode materials for existing customers’ new EV models will begin at the plants in Hungary and South Korea, and orders from new customers secured through the Hungarian plant are also scheduled to enter production starting in 2028. Taking this into account, annual cathode material sales are projected to rise from 69,000 metric tons this year and 71,000 metric tons next year to 106,000 metric tons in 2028. An analyst stated, “We maintain our medium- to long-term growth outlook, as the company will benefit from increased regional demand for materials driven by the IAA through its Hungarian plant and will also enter the U.S. LFP BESS market with the establishment of a new LFP production line.” The analyst added, “In particular, the increase in cathode material sales starting in 2028 offers high visibility, so we recommend an investment strategy based on this trend.”